PEARSON FINAL EXAM . LIFE, ACCIDENT AND HEALTH INSURANCE (EXAM 5). COMPLETE QUESTIONS AND EXPLAINED ANSWERS ALREADY GRADED A+.

PEARSON FINAL EXAM . LIFE, ACCIDENT AND HEALTH INSURANCE (EXAM 5). COMPLETE QUESTIONS AND EXPLAINED ANSWERS ALREADY GRADED A+. Which of the following health insurance policy provisions allows an insurer to deny a claim that does not occur during the policy period? Answer: B insuring clause The insuring clause specifies the time frame of the policy period which is generally one year. Therefore, accidents or illnesses occurring prior to the policy's inception date are not covered. Which of the following statements is true with regard to limited health policies? Answer: c limited policies must state clearly what coverage they provide Limited policies pay benefits for an individual illness or an accident. These policies must state prominently that they are limited in nature. Cancer only or dread disease plans are two common types of limited health insurance policies. AD&D coverage provides all of the following benefits, EXCEPT: Answer: c benefits for loss of sight due to an illness Accidental death and dismemberment coverage, whether provided as a rider or an individual policy, does not provide benefits for an insured as a result of an illness. To be eligible for coverage under Part C of Medicare, an individual does not have to prove that he or she is insurable if enrollment occurs during what period of time following the attainment of age 65? Answer: c six months No evidence of insurability is required if enrollment occurs during a six- month period following the individual's 65th birthday. After this six month period the individual must prove that he or she is insurable. In most States, domestic insurers must be examined or audited: Answer: c at least once every five years Most states require that licensed insurers be audited at least every fifth year to ensure solvency. A few State Departments of Insurance require it every year (e.g., New Jersey). Please consult your State law chapter in your textbook. The main purpose of the underwriting department is? Answer: d to review applications The function and purpose of underwriting is to review applications for insurance coverage to determine if the proposed insured is insurable. If a life insurance policy becomes a modified endowment contact, it may revert back to an ordinary life policy within: Answer: D it is not allowed to revert back to an ordinary life contract Once a whole life policy is determined to be a Modified Endowment Contract (MEC) it may not revert back. This means that the tax benefits included in a whole life policy will be suspended when there are any distributions of cash from the contract. Interest credited to the cash value is general tax deferred. Once labeled as a MEC, a policy loan may be subject to taxation when it otherwise would not be. The policy become a MEC when the owner violates the 7 pay test. If an individual makes a payment to fund an annuity contract today and the benefit commences thirty days later, which of the following contracts has been purchased? Answer: b immediate annuity An immediate annuity has no accumulation period. Once it is purchased, a monthly payment begins approximately thirty days after purchase since that is the usual time it takes to process the application. An immediate annuity is best suited for someone who needs "immediate" income. A person who is totally disabled is an example of someone who needs income right away. Which statement listed is false when discussing policy illustrations? Answer: d only guaranteed elements of the contract must be listed Policy illustrations must list both guaranteed and non-guaranteed elements of the contract. They are designed to provide full disclosure to the client, thus protecting them against unfair and exaggerated hypothetical illustrations. Which of the following is not considered to be one of the Required Uniform Accident and Health policy provisions? Answer: b free-look provision The free-look provision must be included in all life and health insurance policies issued in most states. Most free-look periods are ten days except for Medigap and Long Term Care plans which require a thirty-day free-look. This provision is not one of the required uniform or optional uniform policy provisions, although it is statutorily required in most locales. Tim has a whole life policy with an assortment of riders attached. He is blinded in an accident and receives proceeds from one of the riders. Which of the following riders paid a benefit for his loss of sight? Answer: d accidental dismemberment rider The AD&D rider pays benefits for accidental death, dismemberment, or loss of sight, hearing or speech. Each of the following statements is true with regard to the modifications made to an existing life insurance policy, EXCEPT: Answer: c the change must be countersigned by the agent This provision states that any changes made to the contract must be in writing and endorsed or attached to the policy. It also states that only an officer of the insurer or authorized home office personnel possess the authority to make any changes or modifications, or waive a policy provision. A producer or agent need not countersign any such modification. A surplus lines insurance carrier is also referred to as a: Answer: A - non-admitted insurer a non-admitted carrier may also be called an unauthorized insurer. An employer is mandated to offer COBRA benefits as long as he or she employs: Answer: D 20 or more employees COBRA provides for the continuation of health insurance coverage. Employers with twenty or more employees must offer COBRA. Once employment is terminated, an individual generally has sixty days to select coverage through COBRA. Which of the following is not a necessary underwriting tool to determine eligibility for insurance provided a premium was submitted with the application? Answer: A a statement of good health The statement of good health is provided by the insured at contract deliver only if the original policy submission did not include the initial premium requirement. Which of the following is not a responsibility of a field underwriter? Answer: A issue a policy The issuance of an insurance policy is the responsibility of the home office under- writers, not a producer (i.e., field underwriter). Long-term care insurance coverage may be secured through each of the following, EXCEPT: Answer: c a rider added to a disability income plan Long-term care coverage is available to a person by: (1) buying an individual plan from a licensed insurance carrier; (2) receiving coverage through a group plan; or (3) attaching a rider to a life insurance policy. The latter method generally requires the payment of an additional premium as well. Accident and Health policies include several uniform provisions, one of which is called the "claim form" provision. An insurer is required to send a proof of loss form to an insured within what period of time after notice of loss has been provided by the insured? Answer: d 15 days One of the twelve required uniform policy provisions is the claim form provision. Also known as the "proof of loss form" provision, it requires that an insurer send a claim form to the insured within 15 days after it has been notified of the covered illness or accident. A Point of Service plan (POS) is a hybrid arrangement that combines the aspects of a traditional HMO and a PPO. Such plans allow treatment inside or outside the "network". If the POS requires that a member insured provide notification of treatment outside the network, which of the following generally must be notified? Answer: b the gatekeeper